News You Need to Know: Daily Roundup, Wed., Oct. 11th

Backlash Against Merit Scholarships is Growing

More colleges are joining the movement to replace merit with need-based financial aid. States that recently have eliminated or significantly reduced merit scholarship programs include Florida, Illinois and Maryland. To much criticism in higher education policy circles, merit aid has has been on the rise since the mid-1990s. In 2003-2004, 16% of all financial aid grants were based on merit, an increase from 6% in 1993-1994. Colleges use merit aid to compete for high-achieving high school students who can help improve their rankings. These scholarships disproportionately go to upper-income students. In 2003-2003, 30% of merit students families had incomes above $92,400. Now, some colleges and states are starting to recognize that low-income students with much greater financial need benefit more from college financial aid. But many smaller, private schools still do not believe they can afford to cut back on merit scholarships, because they argue merit students contribute significantly to enrollment numbers and revenue.

Schumer Introduces Bill to Repeal School-as-Lender Program

Senator Charles Schumer (D-NY) introduced an amendment to the Higher Education Act of 1965 to repeal the school-as-lender program. Under this program, colleges lend money directly to students and then profit from federal subsidies and the sale of the loans to commercial lenders. Loans originated under the school-as-lender provision increased from $535 million in 1999-2000 to more than $1.5 billion in 2003-04. Initially, the program was intended to be a last-resort measure for students who could not obtain financial aid elsewhere. Now, there is debate about whether schools are using the program as a source of revenue, acting simply as an extension of private lenders and securing bigger profits as students incur more debt. Earlier this year, Higher Ed Watch staff called the school-as-lender program a "kickback scheme" on the CBS News program 60 Minutes.

Higher Education Groups File Brief in Support of Race-Based School Assignment

A group of 20 higher-education groups filed an amicus curiae brief yesterday advising the Supreme Court to protect the constitutionality of race-based school assignment. While the two cases in front of the Court involve public school districts in Louisville and Seattle, the groups fear that a decision against race-conscious public school policies could affect affirmative action at colleges. The cases are the first taken up by the Court on race-based preferences since its 2003 ruling involving admissions policies at the University of Michigan. The brief argues that the Court should follow the same guidelines established for higher education in the Michigan case and allow the educational judgments of the schoolsthat race-based assignments benefit their studentsto take precedence.

Hickok Advocates for More Transparent Higher Education System

An op-ed in the New York Times today by Eugene Hickok, the deputy secretary of education during President Bushs first term, argues that the higher education community can learn some valuable lessons from the goals of No Child Left Behind. Hickok contends that institutions of higher education must provide more transparent information to taxpayers and potential students on their activities, cost and performance. His plan to increase the quality of information includes developing accurate measures of student achievement and disseminating reports on curriculum, teaching, and tuition.